Termination of employment

Termination of employment is an employee's departure from a job. Termination may be voluntary on the employee's part, or it may be at the hands of the employer, often in the form of dismissal (firing) or a layoff. Dismissal or firing is generally thought to be the fault of the employee, whereas a layoff is generally done for business reasons (for instance a business slowdown or an economic downturn) outside the employee's performance.

Firing carries a stigma in many cultures, and may hinder the jobseeker's chances of finding new employment, particularly if he or she has been sacked from previous jobs. Jobseekers sometimes do not mention jobs from which they were fired on their résumés; accordingly, unexplained gaps in employment, and refusal or failure to contact previous employers are often regarded as "red flags".

Dismissal is when the employer chooses to require the employee to leave, generally for a reason which is the fault of the employee. The most common colloquial terms for dismissal in America are "getting fired" or "getting canned" whereas in Britain the terms "getting the sack" or "getting sacked" are also used.

A less severe form of involuntary termination is often referred to as a layoff (also redundancy or being made redundant in British English). A layoff is usually not strictly related to personal performance, but instead due to economic cycles or the company's need to restructure itself, the firm itself going out of business or a change in the function of the employer (for example, a certain type of product or service is no longer offered by the company and therefore jobs related to that product or service are no longer needed). One type of layoff is the aggressive layoff; in such a situation, the employee is laid off, but not replaced as the job is eliminated.

In an economy based on at-will employment, such as that of the United States, a large proportion of workers may be laid off at some time in their life, and often for reasons unrelated to performance or ethics. Employment termination can also result from a probational period, in which both the employee and the employer reach an agreement that the employer is allowed to lay off the employee if the probational period is not satisfied.

Often, layoffs occur as a result of "downsizing", "reduction in force" or "redundancy". These are not technically classified as firings; laid-off employees' positions are terminated and not refilled, because either the company wishes to reduce its size or operations or otherwise lacks the economic stability to retain the position. In some cases, a laid-off employee may eventually be offered their old position again by his/her respective company, though by this time he or she may have found a new job.

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